Valentin Inc. is a company who uses MRP to organize its production. The lot-sizing technique they chose for all references is lot-for-lot. They provide part of the product tree structure for products
A and B (the figures shown indicate the number of component required to produce a product of the next level).
Product
Y(2)
Product B
A
Z(3)
Y(1)
Z(1)
W(2)
The components Y and W are used exclusively in the production of products A and B. They are produced by the same company and could not be purchased from an other company: the lead time is 2 months. Component Z is manufactured by a subcontractor and its lead time is 1 month.
Usually, deliveries are received at the beginning of the month.
At the end of January, the inventory for Y is 200 units ; a 400 units (Y) delivery is expected at the beginning of February, and a 500 units (Y) delivery at the beginning of March. A safety stock is required on a month-basis: it should be as high as 10 % of the gross requirements of the month that it is planned for.
Production planning for products A and B is presented in the following table. Those products are specific and demand that cannot be supplied is postponed (what has not been produced this month, will be required for the next month).
We assume that there are no capacity constraints for the production of any of the products or components. Product A
Gross requirements A
Planned-order-receipts
On-Hand Inventory
Jan.
80
Net requirements
Feb.
190
110
0
0
Planned order receipt
220
Planned order release
Product A
Gross requirements A
Planned-order-receipts
On-Hand Inventory
Net requirements
Planned order receipt
Planned order release
Jan.
50
Feb.
90
90
50
0
0
70
Mar.
Apr.
May.
Jun.
Jul.
Aug.
220
180
150
200
240
230
0
220
220
180
0
180
180
150
0
150
150
200
0
200
200
240
0
240
240
230
0
230